Austin has edged out Dallas in the competition for the top U.S. real estate market.
Both Texas cities headed the list of the best places to invest in property and develop in 2017, according to the annual Emerging Trends in Real Estate report by the Urban Land Institute and PricewaterhouseCoopers.
The study surveys real estate execs across the country for their predictions about the U.S. property market and economy.
Last year, the closely watched report ranked Dallas-Fort Worth first and Austin a close second.
“This year Dallas flip-flopped with Austin,” said Andrew Warren, PwC’s director of research. “Austin has been steadily climbing in the last 10 years.
“Both markets still look very good.”
This year the D-FW area still received high marks for affordable housing and business costs and a diversified local economy.
“The economy survived the global financial crisis better than most other U.S. markets and the real estate fundamentals continue to avoid the boom-bust behavior that has plagued the market in the past,” the report said about D-FW. “The Dallas-Fort Worth metro area has avoided becoming a victim of its own success, although rising demand is pushing up the price of housing in the market.”
D-FW got higher scores than Austin for its office market, apartments and housing conditions.
But Austin got the “top city” award for 2017 thanks to its high-tech environment, economic diversity and niche development opportunities.
“The capital of Texas has consistently ticked the majority of the top boxes related to real estate market attractiveness,” the report said. “Despite Austin’s growing popularity, it remains a comparatively small market in terms of investment opportunities. While Austin is unlikely to attract a meaningful amount of offshore capital, it tops many domestic investors’ wish lists.”
“Austin’s rise to the top of the list signals the durability of the city’s long-term appeal to investors,” Mitch Roschelle, PwC partner and real estate research leader, said in a statement. “Austin, along with many of this year’s top 10 cities, boasts attractive, niche neighborhoods and a vibrant, diverse economy.”
Other markets high on the real estate industry’s wish list for 2017 include Portland, Seattle and Los Angeles. No Northeastern markets made the cut.
Atlanta and Denver fell off the ranking completely because of worries abort overbuilding.
The 38th annual Emerging Trends report is based on interviews with over 2,000 investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants.
The results are being released this week in Dallas at the annual meeting of the Urban Land Institute, the country’s largest commercial real estate organization.